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Russian Railways counts on increasing freight traffic with Japan

Russian Railways is intensively developing relations with Japanese partners in
the field of freight traffic, said Alexei Shilo, Director for Commercial Activities
at Russian Railways.

Shilo was speaking at the session “Russia-Japan Partnership: Implementing
Euro-Asian Transit Potential,” which was held during the Eastern Economic Forum
in Vladivostok.

“We were in Tokyo in May and, with the support of our trade mission, held
a meeting with shippers and operators in Japan. Our goal was to demonstrate the opportunities
offered by the Trans-Siberian Railway and Russia’s railways in general,”
said Shilo.

Shilo noted that over the last 5 years, shipments on the Trans-Siberian Railway
had increased by 33%, including container transportation, which rose by 49%. In the
8 months to the end of August 2018, the shipping of containers on the Trans-Siberian
increased by 23%. The volume of shipments between Russia and Japan since the beginning
of the year amounted to 169,000 tons, a rise of 22%.

“We see that we have very great potential to cooperate with our Japanese
colleagues. We also realise that the opportunities that the Trans-Siberian Railway
offers this market are not being fully exploited. As a result, the main thing for
us today is to build trust,” said Aleksey Shilo.

OJSC Russian Railways is working intensively on developing the Trans-Siberian route.

“Over the past 5 years, we have invested more than 300 billion roubles in
modernising the Baikal-Amur Mainline and the Trans-Siberian Railway. Shipments have
increased by 69.9 million tons since 2012. We plan to implement the second phase of
the project, which will enable us to increase shipments by an additional 94 million
tons by 2025. We would like to use this infrastructure, among other things, to increase
the volume of goods transported from Japan,” said the Director for Commercial
Activities at Russian Railways.

Speaking about the tariff policy on Russia’s railways, Shilo noted that clear,
transparent and predictable price conditions for consignors had been in place for
several years now. In order to attract additional freight volumes, Russian Railways
has not increased the rates for transporting transit containers since 2012. In addition,
the Company is ready to provide additional preferences if shippers can guarantee certain
levels transportation volumes.

According to Isao Takahashi, the president of Toyo Trans (Japan), Japan is carefully
studying the experience of transit traffic via the Trans-Siberian Railway, including
from China to Europe.

The main requirements on the part of consignors are ensuring speed, safety and
environmental friendliness.

In this regard, rail transport is extremely attractive.

Freight dispatched from Japan to Europe by sea takes over 50 days, but just 20
days by rail.

To assess delivery conditions and build new logistics chains, Japanese shippers
are testing the delivery of goods by container.

“Together with Japanese partners, we are conducting test runs, which showed
good results with regard to delivery times for these cargoes. The containers were
equipped with special sensors, and now our colleagues are assessing the impact of
the journey on the freight. After that, we shall look at making any necessary adjustments
to the transportation organisation,” said Alexey Shilo.

Shilo said that Russian Railways provides high speeds and reliability of delivery.
The guaranteed route speed of container trains is not less than 1,000 km per day,
but the target is to reach 1,150 km per day before the end of this year.

Vladimir Putin, the President of Russia, has set a target of providing transit
between Russia’s eastern and western borders in just 7 days by 2025, which is
equivalent to a route speed of 1,400 km per day.

“Over the past year, we have ensured 98% delivery reliability. Some foreign
rail companies have a lower level of performance with regard to passenger train timetables.
On average, we now receive one complaint from our customers for every 65,000 shipments,
each of which we investigate carefully in order to avoid a similar repetition in the
future,” emphasised Alexey Shilo.

Transportation by Russian railways also has a very high level of security.

“We are implementing the project “Security Train” – this
provides a completely different level of monitoring regarding the movement of freight
and involves the use of satellite-based technologies and electronic locking and sealing
devices. We are doing this in order for the users of our services to be able to can
follow the progress of their goods online and see that everything is in order,”
said Alexei Shilo.